Wednesday, June 12, 2013

Opening comments ahead of USDA Report 6-12-2013

Well it’s hurry up and wait time.  Markets are called mixed this a.m. but it’s all about the USDA report that will be out in a few hours at 11 a.m. central time.  The prices before then won’t matter much as the USDA report should give us a little updated fundamental information.

In the overnight session corn was down 2-4 cents, KC wheat was 2-4 lower, MPLS wheat was unchanged, CBOT wheat was off 4-6 cents, July soybeans were up 3 cents a bushel, and November soybeans were down 3 cents a bushel.  Outside markets are fairly stable today with the US dollar about unchanged with the cash index at 81.189, crude is up about 80 cents a barrel, gold is down 3 bucks an ounce, and equity futures point towards a positive 70-90 point start in the DOW.

Like I mention above its not were our markets start before the USDA report but how then end up after the USDA report that’s important.

Before the report comes out we will have ethanol numbers; but otherwise it is just about the USDA report and the weather.  Too much rain in areas like North Dakota, Iowa, and parts of MN remains very bullish due to the loss of acres, prevent plant acres, agronomic issues, and replanting acres.  While rain in the eastern corn belt is probably seen as bearish prices as most of the crop is in and they are not really behind schedule from a historic basis.  The 6-10 day forecasts have above normal temps for our area and above normal to normal precipitation for our area.  Many areas need some heat.

Continue to watch for plenty of debate on weather.

For wheat we continue to lack issues elsewhere in the world; plenty of issues with the HRW crop and possible issues with the spring wheat crop.  But we still are not getting the business we really need.

As for the report we could easily just trade it for a few minutes or it could change our trend for a month or more.  Most likely the market will take a wait and see confirmation until we get more weather information and the updated acre and stocks report on June 28th.  It just seems like we have way to many unknowns to take all of the premium we have in our market out and at the same time should the USDA come in below the grain markets expectations the market might take a wait and see approach or confirmation that demand will stay strong.

Bottom line is that today is all about the USDA but it remains to be seen if tomorrow or a week from now we will still be talking about the USDA report from today or if the market will be looking at other information such as weather and what it will do to supply.

Not much else to say today; just make sure you are comfortable going into the report later this a.m.

Still time to make some sales or get some protection in place if you are not.  Just remember the fine line from making fear decisions and good business decisions; no operation is the same and thus no % sold level is right for everyone. 

Don’t forget we will have our weekly meeting in Onida this afternoon at 3:00; we will be going over the USDA numbers at that time.


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